On 19 July 2019 Mexico became the first country to ratify the United States-Mexico-Canada Agreement (USMCA) when the Senate approved it by an overwhelming majority (117 votes in favour, four votes against and three abstentions). Chapter 20 of the agreement (Intellectual Property) comprises 90 articles and one annex which span 66 pages in the Spanish version, making it one of the most comprehensive IP chapters in any trade agreement.
The IP chapter is divided into 11 sections. A brief summary of each is provided below.
General provisions (Articles 20.1 to 20.11)
The first 11 articles of the USMCA's IP chapter establish definitions and principles relating to all rights, including those provided for under certain treaties. The general aim of these articles is to promote innovation and technology transfer for the benefit of society and in accordance with other fundamental rights.
Notably, the promotion of rights such as the right to health and nutrition are expressly recognised, subject to their consistency with rights codified in other agreements, including the so-called 'Agreement on Trade-Related Aspects of Intellectual Property Rights flexibilities' regarding public health.
As regards international treaties, in addition to those to which they are already party, the parties to the USMCA must sign:
- the Madrid Protocol;
- the Budapest Treaty;
- the Singapore Treaty;
- the International Convention for the Protection of New Varieties of Plants;
- The Hague Arrangement; and
- the Brussels Agreement.
The Patent Law Treaty should also be considered or, at a minimum, standards that are compatible therewith.
General common principles, such as those regarding national treatment, transparency and the agreement's effects on existing or expired IP rights are also addressed in Articles 20.1 to 20.11.
Cooperation (Articles 20.12 to 20.16)
The most relevant provision in the five articles comprising the cooperation section of the USMCA's IP chapter is arguably that regarding the establishment of the Committee on Intellectual Property Rights, which must have its first meeting within one year of the agreement's entry into force. Other cooperation matters addressed in Articles 20.12 to 20.16 include patent prosecution and specific consultations between the parties to the agreement, which can occur on request.
Trademarks (Articles 20.17 to 20.27(11))
The trademarks section of the USMCA's IP chapter comprises 11 articles which span the eligibility of signs to prosecution and classification. Remarkably, the agreement includes an obligation to provide for:
- non-traditional trademarks;
- certification and collective trademarks;
- well-known trademarks;
- certain justifications for enforcement, including loyal use of descriptive terms and interplay with geographical indications; and
- various enforcement options, such as opposition and cancellation proceedings.
The chapter also includes procedures regarding trademarks, domain names and country-code top-level domains which are used in bad faith.
Country names (Article 20.28(1)) and geographical indications (Articles 20.29 to 20.35)
This is perhaps one of the most controversial sections in the USMCA's IP chapter, as it includes an obligation to implement procedures for challenging geographical indications which conflict with pre-existing trademark rights and enables geographical indications to be cancelled if they cease to meet the conditions on which protection or recognition was originally granted.
This section also includes further guidelines for interpreting the terms of, and any conflicts with, existing treaties. However, in reality, it has created greater uncertainty and may lead to intensive litigation within the signatory countries in future.
Patents and undisclosed test or other data
This section is the longest in the IP chapter, comprising 17 articles divided into the following subsections.
Subsection A: general patents (Articles 20.36 to 20.44(9)) The nine articles comprising the general patents section concern:
- the eligibility of subject matter;
- the grace period which commences on publication of a patent by the inventors;
- revocation procedures;
- exceptions to patent rights;
- rules regarding unauthorised use by patentees; and
- other prosecution rules, including with regard to:
- the availability of amendments;
- access to files during prosecution; and
- patent term restoration following unreasonable delays by the patent authorities.
Subsection B: measures relating to agricultural chemical products (Article 20.45)
This single-article section provides for data exclusivity for agricultural chemical products for 10 years (previously five years under the North American Free Trade Agreement) from the date on which the corresponding product is authorised by the corresponding authority.
Subsection C: measures relating to pharmaceutical products (Articles 20.46 to 20.52)
Along with the provisions relating to geographical indications and despite the fact that most of the provisions have already been enacted under the laws of the signatory countries, the seven articles in this subsection have been among the most controversial. Among other things, the provisions concern patent term adjustment for unreasonable curtailment and data exclusivity for:
- new molecules (five years);
- new indications or formulations (three years); and
- biological products (10 years).
The chapter also includes provisions on linkage systems for the sanitary approval of patented products which encompass the systems currently in place in the signatory countries. Notably, the treaty includes a clarification that the data exclusivity and patent terms are mutually independent.
Industrial designs (Articles 20.53 to 20.56(4))
The designs chapter is relatively simple. The main provisions concern the applicability of the grace period to designs and state that protection is available for designs which consist of only part of an article.
Copyright and related rights (Articles 20.57 to 20.69)
As is the case with many copyright-related treaties and local laws, the copyright chapter of the USMCA is complex, dealing mainly with rules relating to the digital environment under which such rights are distributed, copied and stored. The section's main aims are to provide:
- a standard interpretation of certain treaties which have already been signed by the parties to the agreement; and
- enforcement provisions that are more effective in the context of a breach of technological measures taken by copyright owners to prevent unauthorised use of their rights.
This section also concerns changes to rights management information or the means of identifying a work.
Notably, there is a new obligation to provide for transparent collective management societies.
Trade secrets (Articles 20.70 to 20.78)
Ironically, the eight trade secrets articles were the best kept secret during the USMCA's negotiation. For Mexico, this section represents the biggest change to its IP system as it establishes an obligation to introduce civil remedies with specific characteristics and administrative proceedings – including fines – to prevent the unauthorised disclosure of trade secrets by authorities in the country.
Enforcement (Articles 20.79 to 20.89(11) and Annex 20-A)
The 11 articles in the enforcement section and its annex address various problems detected during the enforcement of different kinds of right in order to improve rights holders' ability to enforce such rights. This is perhaps the most comprehensive section of the IP chapter, covering the administrative, civil and criminal enforcement of rights. Specific provisions govern copyright, trademarks and patents, ranging from the complexities of using such rights in the digital environment to clarifying that each patent claim must be considered independently in terms of its validity. This section also sets out:
- obligations concerning the transparency of decisions issued in IP enforcement proceedings;
- the remedies that must be available to rights holders in such proceedings; and
- the methods that must be available to determine damages.
Other provisions concern the availability of customs measures, discovery procedures and the obligations of internet service providers.
Final provisions (Article 20.90)
The single article in the final section of the IP chapter sets out obligations to implement the the USMCA's provisions immediately on its entry into force or within a transitional period of four to five years (depending on the provision) from this date. However, it also includes a provision preventing the signatory countries from changing their legal framework in a way that contravenes their obligations of the under the agreement, even during the transitional period.
Although the 2018 amendments to Mexico's IP laws provided for most of the specific rights required under the USMCA (for further details please see "Mexico moves towards new IP system"), the country still has a lot to do to provide for the obligations regarding geographical indications, data exclusivity, trade secrets and enforcement. However, this work will not commence until the United States ratifies the USMCA and it enters into force. As evidenced by Mexico's ratification of the agreement, Mexican law does not require the country to pass an implementation law. As such, the implementation work for most of the provisions in the IP chapter and the USMCA at large will take a long time, and the incentive to do so will come only once the agreement has been ratified by the two remaining signatories, but particularly the United States. Due to the US elections, the agreement's entry into force is up in the air. Thus, uncertainty is expected to prevail until the agreement is finally ratified or not by all three countries.
For further information on this topic please contact Héctor Elias Chagoya at Becerril, Coca & Becerril SC by telephone (+52 55 5263 8730) or email ([email protected]). The Becerril, Coca & Becerril website can be accessed at www.bcb.com.mx.
